Pessimism among individual investors about the short-term outlook for stocks decreased in the latest AAII Sentiment Survey. Meanwhile, optimism and neutral sentiment increased.
Bullish sentiment, expectations that stock prices will rise over the next six months, increased 3.9 percentage points to 32.7%. Bullish sentiment is below its historical average of 37.5% for the eighth time in 10 weeks.
Neutral sentiment, expectations that stock prices will stay essentially unchanged over the next six months, increased 1.3 percentage points to 19.2%. Neutral sentiment is unusually low and is below its historical average of 31.0% for the 29th consecutive week.
Bearish sentiment, expectations that stock prices will fall over the next six months, decreased 5.2 percentage points to 48.1%. Bearish sentiment is unusually high and is above its historical average of 31.5% for the 33rd consecutive week.
The bull-bear spread (bullish minus bearish sentiment) increased 9.1 percentage points to –15.4%. The bull-bear spread is unusually low and is below its historical average of 6.5% for the 10th consecutive week.
This week’s special question asked AAII members what they thought about the Federal Reserve’s decision to increase interest rates by 0.25 percentage points.
Here is how they responded:
It was the right move: 79.8%
They should have left rates unchanged 12.4%
They should have cut rates: 1.6%
Not sure/no opinion: 6.2%
This week’s Sentiment Survey results:
Bullish: 32.7%, up 3.9 points
Neutral: 19.2%, up 1.3 points
Bearish: 48.1%, down 5.2 points
Historical averages:
Bullish: 37.5%
Neutral: 31.0%
Bearish: 31.5%